Practice Exam Chapters 9-12 1. Montana Co. has determined its year-end inventory on a FIFO basis to be $600‚000. Information pertaining to that inventory is as follows: What should be the carrying value of Montana ’s inventory? A. $600‚000. B. $520‚000. C. $590‚000. D. $510‚000. 2. On July 8‚ a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available: What is the estimated inventory on July 8 immediately
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Goodwill for Impairment CLAUDIA Inc. has an internally generated goodwill and did not amortize or tested for impairment. They cannot amortize because measuring the components are complex and associating the costs incurred with future benefits are too difficult. Goodwill cannot generate cash flows independently and is made as a combination with other assets making up a business; it needs to be assigned to a reporting unit or cash-generating unit in order to test for impairment. Under ASPE‚ the impairment
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Chapter 1 CA1-1 (FASB and Standard-Setting) Presented below are four statements which you are to identify as true or false. If false‚ explain why the statement is false. 1. GAAP is the term used to indicate the whole body of FASB authoritative literature. 2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements. 3. The primary governmental body that has influence over the FASB is the SEC. 4. The FASB
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ACCT201/EXERCISE QUESTION 4/CH.3 Question DMD.‚ opened a dental clinic on August 1‚ 2007. The business transactions for August are shown below: |Aug 1 |Dr. Cravati invested $280‚000 cash in the business in exchange for 1‚000 shares of capital stock. | |Aug 1 |Rented an office and paid 3-month rent in advance‚ $2‚000 | |Aug 4 |Land and building were purchased for $400‚000. Of this amount‚ $60‚000
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list of cost items The costs of generation of steam are conveniently split into Fuel costs Electricity for pumps‚ blowers‚ other equipment Water Feed water chemicals Repair and maintenance (R+M) _______________________________________ Depreciation of boiler and auxiliary equipment Staff costs Note 1: The first set of cost items are variable costs. They occur only if steam is generated. Note 2: The second set of cost items are fixed costs. They occur no matter how many hours the
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Substantive Procedures - Asset Irregularities ACC/556 November 24‚ 2014 Introduction This next phase of the auditing process for Apollo Shoes Inc. (Apollo) is the designing of an audit program‚ which will detail substantive procedures for detecting irregularities in the accounts receivable‚ inventory‚ and fixed assets audit cycles. Fixed Assets Apollo’s irregularities in fixed assets‚ has caused concern for substantive procedures to be designed to audit this cycle. The most common schemes where
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A. What evidence do you see in Exhibit 3.35 of Prime’s strategic shift from refuse to animal care services? Aside from year 8‚ Prime is generating persistent and large net income figures. However‚ during year 8 there is a large amount of depreciation‚ signifying large capital investments. Specifically‚ in years 6 through 7 the company invested roughly $3M in fixed assets. Based on this information I would say that the company was preparing for growth and purchased the assets to jump into the
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Financial Reporting under IFRS and US GAAP | | | University of Economics in Prague | | | Financial Reporting under IFRS and US GAAP | Property‚ Plant and Equipment Content Introduction - The companies 2 Specific Questions 5 Sources 19 Introduction - The companies AUTOMOTIVE INDUSTRY GENERAL MOTORS as representative of U.S. GAAP General Motors from the U.S. Detroit is‚ together with Toyota‚ the largest car manufacturer in the world. The company was established in 1908
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income statement‚ but instead appears as a debit on the long-term assets account and a credit on the cash account of the balance sheet. However‚ the depreciation expense related to the capitalized cost will appear as an expense on the income statement. Since the long-term assets account is larger due to the effect of capitalization‚ the depreciation costs are also proportionately larger. Thus‚ the timing of expense recognition is changed‚ but eventually all expenses do get recognized on the income
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direct and indirect methods Evaluate the comments that follow as being True or False. If the comment is false‚ briefly explain why. a. Both the direct and indirect methods will produce the same cash flow from operating activities. True b. Depreciation expense is added back to net income when the indirect method is used. True c. One
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